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United States crude bounces from 14-week low, amid unexpected gas inventory draw
Oil prices rose on Thursday, extending gains from the previous session following a large draw in U.S. gasoline inventories and a big drop in the dollar since the end of July.
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Analysts believe that investors who buy oil when prices are down also contributed to the price hike.
At about 1545 GMT, US benchmark West Texas Intermediate for delivery in September won 85 cents to $40.36 per barrel. Brent crude futures for October delivery rose 31 cents to $42.11 a barrel, a 0.7 percent gain.
Total U.S. crude oil inventories raised at 522.5 million barrels as of last week, which the Energy Information Administration considered to be “historically high levels for this time of year”.
Aside from the global inventory situation, USA government data on Wednesday showed crude stockpiles rose 1.4 million barrels last week, versus analysts’ expectations for an identical draw.
Crude oil imports averaged 8.738 million barrels a day last week, which was higher by 301,000 barrels a day over the preceding week. Prices entered a bear market – marked by a decline of 20% from a recent peak – earlier this week, with USA futures dipping to a three-month low below $40 a barrel. Gasoline stockpiles fell by 3.3 million barrels last week, well above the 200,000-barrel decline forecast by economists. It hit a more than three-month low of $41.51 the previous day.
James Williams of WTRG Economics said the market reaction did not clearly correspond to conditions.
The post Oil prices rise for second day as gasoline stocks lower appeared first on Vanguard News.
Other analysts dismissed the notion that the USA gasoline draw was driving up crude prices globally, especially given that American crude inventories rose 1.4 million barrels.
“We think in the near term, oil will be under pressure because demand is moderating”.
“Another increase in the rig count in the USA also weighed on sentiment”.
Brent crude LCOc1 rose $1.30, or 3.1 percent, to settle at $43.10.
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Oil rallied from a 12-year low near $27 in January to a 2016 high of nearly $53 in June, supported by an initiative from OPEC and outside producers including Russian Federation to freeze output and by hopes that the supply glut would ease.